Why is Elon Musk $18 billion poorer despite raising $7 billion from A-list investors

It was guessed to be a day off for Tesla and SpaceX CEO Elon Musk after tweeting a $7.1 billion capital commitment for a $44 billion takeover from prominent investors, including Sequoia Capital also Andreesen Horowitz, as well as the Prince of Saudi Arabia. Instead, the current shareholders of Musk's social media company recently clashed on the platform.

But news report that Musk was expected to take over as Twitter's chief executive after the deal closed crippled his parade, likely resulting in a more than 7 percent drop in Tesla's share price by 1 p.m. EST Thursday - and about $18 billion wiped out Musk's fortune. The decline in Tesla shares outpaced the broader tech sell-off, with the Nasdaq down 4.7% as of 13:00 EST.)

"The CEO's interim report concerns Tesla investors as it becomes a distraction fear and a focus for Musk," said Wedbush analyst Dan Ives, who covers Tesla. "That weighed on stocks."

To fund his acquisition of Twitter, Musk originally planned to pledge $62.5 billion in Tesla stock to secure $12.5 billion in margin loans from its bankers and a $13 billion loan partially guaranteed by Twitter itself. But after raising $7.1 billion from outside investors, his margin loans and the number of Tesla shares he was promised were cut in half.

But Musk has also pledged $21 billion to Twitter to fund the acquisition, leaving many to wonder how the Tesla and SpaceX bosses will find the money. Even after selling more than $8 billion (before tax) of stake in the electric car maker last week, Musk only has about $8 billion in cash, according to Forbes estimates. So the $7.1 billion raised from outside investors could bring Musk closer to meeting his financial commitments. Interestingly, he instead chose to increase his equity exposure to $27.3 billion, an increase roughly commensurate to the amount he raised from outside investors, indicating that he is confident of finding more partners.

In other words, we got as far yesterday in terms of Musk's money-hunt, which could also be embarrassing for investors who have dumped Tesla stock in recent weeks, possibly fearing selling Musk's stock to finance the Twitter acquisition would lower Tesla's stock price.